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Medicare Physician Fee Schedule
July 20, 2026
2027 Medicare Physician Fee Schedule Proposed Rule

2027 Medicare Physician Fee Schedule Proposed Rule

On July 14, 2026, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule covering Medicare payments under the Physician Fee Schedule (PFS), as well as other Medicare Part B issues.  Should these proposals become finalized this November, they would go into effect on or after January 1, 2027.  The agency also released a fact sheet outlining the key provisions of the proposed rule.  Some of the payment provisions, as well as those pertaining to the anesthesia community, are summarized below.

2027 Medicare Physician Fee Schedule Proposed Rule

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Background

Medicare payments to physicians and other medical professionals are based on the resources typically used to furnish the service.  Relative value units (RVUs) are applied to each service for (a) work, (b) practice expense, and (c) malpractice expense.  These RVUs become payment rates through the application of a conversion factor (discussed below).  Geographic adjusters (geographic practice cost indices) are also applied to the total RVUs to account for variation in costs by geographic area.  Payment rates are calculated to include an overall payment update specified by statute.

Conversion Factor

You may recall that, beginning in 2026, there are now two separate categories applied to both the RBRVS (non-anesthesia) conversion factor and the anesthesia conversion factor: one for qualifying alternative payment model (APM) participants (QPs) and one for physicians and practitioners who are not QPs.  By statute, QPs are those who meet certain thresholds for participation in an advanced APM, which generally means that the payment model has features to ensure accountability for quality and cost of care.  The update to the qualifying APM RBRVS conversion factor for 2027 is +0.75%, while the update to the non-qualifying APM RBRVS conversion factor for CY 2027 is +0.25%.  Okay, that seems like relatively good news.  At least there’s an increase, right?  But there’s more to the story.

According to the CMS fact sheet, “the changes to the conversion factors for 2027 include these updates as required by statute and an estimated +0.53% adjustment necessary to account for proposed changes in work RVUs for some services.”  However, Public Law 119-21, which CMS refers to as the Working Families Tax Cut (WFTC) legislation, provided a one-year PFS conversion factor increase of 2.5% for 2026, which will no longer be in effect for 2027.  This means that current law requires a 2.5% reduction in Medicare payment under the PFS compared to 2026.  Having said that, here’s what we’re looking at as it concerns the effective conversion factors CMS is proposing for 2027:

  • The 2027 QP RBRVS conversion factor is $33.17.  This represents a decrease of $0.40 (-1.19%) from the current conversion factor of $33.57.  Similarly, the 2027 non-QP RBRVS conversion factor is set at $32.84, reflecting a decrease of $0.56 (-1.68%) from the current conversion factor of $33.40.  Keep in mind that most providers would fall under the non-QP category.
  • As to the anesthesia conversion factor, we must look again at two separate figures: one for QPs and another for non-QPs.  For 2027, CMS proposes a QP anesthesia conversion factor of 20.4165, which is a bit lower than the 2026 rate of 20.5998.  This represents a 0.8% decrease for next year.  The non-QP anesthesia conversion factor—which would apply to most anesthesia providers—is listed as 20.2143.  Again, this is slightly lower than the 2026 anesthesia non-QP conversion factor of 20.4976, reflecting a 1.38% decrease.

The American Society of Anesthesiologists (ASA) was quick to respond to the proposed changes in the conversion factors.  They released the following statement:

ASA is deeply disappointed by the proposed conversion factors as they come at a time when inflation and increased costs are affecting anesthesia groups.  The proposed rule underscores that the Medicare payment system is fundamentally broken and that legislative reforms are needed.  ASA remains committed to working with legislative stakeholders and regulatory agencies to reverse this negative impact on anesthesiologists and propose constructive and meaningful solutions.  Such legislative reforms should include an annual adjustment for physicians to partially account for inflation and the modernization of fee schedule budget neutrality requirements. 

Anesthesia Add-on Codes

According to the ASA, CMS is soliciting comments on three anesthesia services—as reflected by CPT 01953, 01968 and 01969—to confirm whether the concept of an add-on global period assignment would be appropriate for these anesthesia codes.  “The selected anesthesia codes are reported in addition to the primary procedure to report the additional dose or level.”  Currently, these add-on codes do not have a global period assigned to them.  The ASA plans to prepare a response to this solicitation.

We will have more updates from the proposed rule in upcoming alerts, including those proposals that address chronic pain, critical care and CMS quality programs.